The Italian bank muscling in on big deals

When it comes to winning a seat at the table for the world’s biggest M&A deals, industry expertise, a global outlook, meticulous preparation and confidence count for more than size and rank. So says Marco Rottigni, head of the Global Corporate Department at Intesa Sanpaolo’s Corporate and Investment Banking division.

Last year saw the bank – Italy’s best capitalised – take leading roles in major deals in sectors as diverse as telecoms, media and tech (Dell EMC), energy and utilities (Gas Natural) and healthcare (Bayer and Monsanto).

“We are not the biggest player, so we target well,” says Rottigni. “We make the most of our moderate dimensions and our industry expertise to participate in the world’s biggest deals and syndications.”

Key to this success, he believes, is the bank’s organisation by 11 key industry sectors.

“Our competitive advantage is we speak the same language as people in that sector,” he says.

The sectors are: automotive and mechanics; basic materials and healthcare; business solutions; energy and utilities; food and beverage and distribution; global EPC and integrated logistics; infrastructure and real-estate partners; oil and gas; public finance; retail and luxury; telecom, media and technology.

They are managed by specialist, industry-experienced teams working across the bank’s fast-growing international network, hand-in-hand with its investment banking arm, Banca IMI.

“We are not the biggest player, so we target well. We make the most of our moderate dimensions and our industry expertise to participate in the world’s biggest deals and syndications”

This robust and reliable reputation in acquisition finance – alongside a strong balance sheet, the ability to collaborate with other banks and an existing relationship with Bayer, through the bank’s Frankfurt office – helped persuade the German giant to include Intesa Sanpaolo in the financing team.

In the case of computer giant Dell’s $67bn bid for data-storage provider EMC – 2016’s biggest technology, media and telecoms (TMT) deal – there was no working history on which Intesa Sanpaolo could build, but its industry-specialist team was undeterred.

With the support of New York office colleagues and a bold self-introduction, Intesa Sanpaolo secured $1bn of the financing. Always aiming for a major role rather than one on the sidelines, the team made the initial phone calls before flying to Dell’s Austin headquarters, where an hour with the company’s CFO proved fruitful.

Presenting a sound business case, and an insightful understanding of the deal, the team evidenced their ability to deliver with previous experiences such as the Anheuser-Busch InBev deal, Altice’s acquisitions of Numericable-SFR and Portugal Telecom, and America Movil’s purchase of KPN.

Sectors are managed by specialist, industry-experienced teams working across the bank’s fast-growing international network

As things progressed, updated proposals were presented to Dell. Two months after the Austin meeting, the team was called on board, offering to up the proposed $400m of financing to $1.08bn.

Dell Technologies is now the world’s biggest private technology company, with a net worth of $20bn.

“Our weapon in these very sizeable deals is our horizontal vista,” says Rottigni.

“With these operations we offer all our skills and competencies and our international perspective, and we give a very long-term value to relationships.”

“There are aspects of banking where you must absolutely follow the rules. But you cannot do it without flexibility, curiosity, courage and creativity” – Marco Rottigni

With the industries all headquartered in Milan, relationship managers in the international hubs augment sector expertise in the most relevant geographic locations.

When an opportunity to purchase a large share of Spanish energy company Gas Natural arose last year, for instance, the team in Milan worked with energy-experienced relationship managers in the Madrid office and the structured-finance team from Banca IMI in London to present an attractive package for the buyer, Global Infrastructure Partners (GIP).

“Teamwork must be pushed to the extreme. Everyone has to feel responsible towards everything,” explains Rottingi.

Intesa Sanpaolo was awarded the role of mandated lead arranger in the transaction and a €13m credit line for a €150m notional share of the interest-rate hedging. The bank’s final allocation was the equivalent of €70m for the margin loan, with upfront fee and net interest margins both around €1m.

Success, Rottigni points out, does not only result from an impressive company CV. Attitude – shared right across the bank – is also fundamental.

In times of volatility – “with no single, certain future” – the right characteristics are vital in overcoming challenges and winning deals.

“There are aspects of banking where you must absolutely follow the rules,” he says. “But you cannot do it without flexibility, curiosity, courage and creativity.”